Autodesk Profit Tops Estimate

(RTTNews) - Design software maker Autodesk, Inc. (ADSK) said Thursday after the markets closed that its third quarter profit fell 81% from last year, as higher costs and expenses more than offset an 11% increase in revenue.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue.

At the same time, the company forecasts fourth quarter revenue above and earnings below analysts' current consensus estimates. The company once again raised its full year revenue forecast.

"Strong billings and revenue growth was driven by strength in several areas including suites, our Architecture, Engineering and Construction and Manufacturing business segments, large deal activity, and double-digit growth in all three of our major geographies on a constant currency basis," said Carl Bass, Autodesk president and CEO. "We continue to make meaningful progress in our transition to a more recurring, subscription-based business, adding approximately 121,000 subscriptions and more flexible enterprise license agreements. As a result, deferred revenue increased significantly to a record $1 billion. These strong results have led us to raise our outlook for billings and revenue for fiscal 2015 for the third time this year."

Autodesk shares are currently gaining 3.20% in after hours trading after closing the day's regular trading session at $58.41, down 69 cents or 1.17%. The shares trade in a 52-week range of $42.21 to $60.20.

For the third quarter ended October 31, 2014, the San Rafael, California-based company reported net income of $10.7 million or $0.05 per share, compared to $57.6 million or $0.25 per share for the year-ago quarter.

Excluding items, adjusted net income for the third quarter was $57.7 million or $0.25 per share, compared to $94.3 million or $0.41 per share in the prior year quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.22 per share for the third quarter. Analysts' estimates typically exclude special items.

Operating margin for the quarter narrowed to 2% from 12% a year earlier, while adjusted operating margin shrank to 13% from 22% last year.

Revenue for the third quarter rose 11% to $618.0 million from $555.2 million in the same quarter last year. Fourteen analysts had a consensus revenue estimate of $601.88 million for the third quarter.

Revenue from Flagship products grew 5% from last year to $288 million, while revenue from Suites increased 13% to $225 million in the third quarter. Total billings for the quarter increased 25% year-over-year.

The company's deferred revenue at the end of the third quarter was a record $1 billion, an increase of 31% from a year earlier.

Last month, Autodesk announced the appointment of Scott Herren as senior vice president and chief financial officer, effective November 1.

Looking forward to the fourth quarter, the company forecasts revenue of $640 million to $655 million, earnings between a loss of $0.03 per share and breakeven per share and adjusted earnings of $0.22 to $0.25 per share. Analysts currently expect the company to earn $0.30 per share on revenue of $635.45 million for the fourth quarter.

For the full year fiscal 2015, the company now forecasts revenue growth of 9% to 10%, up from its prior forecast of 7% to 9% and better than analysts' current forecast of 8.50% growth.

The company forecasts earnings of $0.30 to $0.33 per share and adjusted earnings of $1.15 to $1.18 per share for the full year fiscal 2015. Analysts currently expects the company to earn $1.20 per share for the full year.